2009 began with a global challenge. This is a result of the collapse of the financial systems in North America and Europe. What we had observed from the financial systems had a direct impact to various industries, in particular, the manufacturing sector.
Today, a global automotive giant, General Motors, is in the process of filing for Chapter 11 status in the United States. This is an example of the failure in the financial system affecting an industry that employs thousands.
Governments in North America and Europe have been working hard to introduce stimulus packages to curb this extent of financial impact.
In Malaysia, the Government too has proactively introduced stimulus packages to re-establish economic stability and emerge from the current global economic downturn stronger and with a long-term strategy for Malaysia’s economy that can serve all of our people.
The Government has announced a large mini budget of RM60bn to cushion the effects from a sharp slowdown in the global economy.
In addition the Government is planning a second package to sustain growth and stem rising unemployment. It is in the interest of the nation that the Government intends to take necessary measures to avoid the worst of the global recession.
Malaysia is an open economic nation, focusing on the growth of technology and services. Government agencies such as MIMOS and MDeC are examples of our interest and commitment towards a diversified economy.
A Need for a Success Strategy
We are all anxious about implementing a success strategy that will work during this difficult moment. Businesses are concerned about revenue as well as profits. People are concerned about employment and earnings. The market and the customers are concerned about their needs being met through the delivery of products of competitive cost and quality.
In reality we are delivering services to our customers – by manufacturing a product from conception to completion, or by sequences of logical activities to ensure a requirement is met.
However, from our conceptual understanding of a delivery of a simple service to the actual execution – something intervenes and alters the logical sequence into complexity – Problems.
We are then driven by pressure, real or perceived, to deliver the services and results – to solve the problems. People are also driven by the allure of accolades for solving the problem, thus the need for quick fixes becomes the culture of problem solving – as an adrenaline addiction.
For many years, organizations have focused on addressing the symptoms through series of quick fixes, moving from issues to issues, whilst forgetting the fact that these quick fixes are fuels that propagate future problems. The problems begin to appear in a cyclical nature – a somewhat self fulfilling prophecy.
All problems statistically begin in a same way – as small issues that were left unattended. These issues procrastinate and like cells and molecules – they cling and bond to form larger substance – problems of a different nature that are harder, tougher and complex to be solved.
Once a complex problem arises- as the global economic downturn that we all hear about today- a much larger and complex strategy is required to address it. Creating the need to establish a success strategy that will eliminate the problem.
This strategy will also be required to ensure that not just problems are solved but a culture of future is established – a culture of continuous improvement, innovation and cost saving.
Lean and Six Sigma
What we see as an effect of the global economic slowdown is organizations beginning to slash fixed asset costs – this includes the rationalizing of manpower. Eventually, they will be driven to rationalize their revenue stream itself. It is at this stage the worse begins to materialise.
Organizations begin to realise the necessity of survival and begins to use that as the agenda for “CHANGE” and creating a platform to rally upon.
- CHANGE requires the use of structured methodology. It also requires discipline.
- CHANGE requires the development of people – today’s knowledge workers – to have the ability to identify 20% of the inputs that causes 80% of the undesired output.
- CHANGE can use powerful and proven methodologies such as Lean and Six Sigma as the principle way to achieve the goal set-out in businesses and in organizations. Closing the gaps that were previously left unattended.
Fundamentally, Lean and Six Sigma’s approach is to reduce variation in the desired output by keeping the critical inputs under control.
By reducing the output variation – the ability to meet the required need of customers and people can be greatly improved. At the same time opportunities for improving quality, costs and growth is created.
These opportunities are sustained by developing employees as CHANGE-agents, that can identify and solve problems and deal with the changing business environment.
In order to support the implementation and execution of a success strategy, organizations will need to have a blend of able leadership and competent management. With a burning platform of survival in the backdrop – organizations will need to have leaders that are Facilitators of Change.
Leaders becoming Facilitators of Change is imperative, especially to lead a global workforce of knowledge workers, through the challenging economic climate. Facilitating Change a significant challenge as it is never easy to change people and the mindset. Why does a leader need to able to Facilitate Change?
- To inspire trust and confidence to the knowledge workers.
- To chart a course of strategic direction for the organization and the workforce – to motivate towards the best result.
- To develop a culture of excellence through best-in-class work processes, systems, procedures & policies
- To identify, develop and unleash the talent and potentials of the knowledge workforce.
Contrary to the popular action of reducing headcounts as a solution to reducing fixed costs – organizations should embark on enhancing the business through reduction of waste, improvement of quality and processes.
In conclusion, organizations have to embrace the fact that human capital development is one key aspect to counter the sluggish 2009 economy. This is an asset that will pay handsome dividends during all financial cycles.
Leaders would need to facilitate and inspire the workforce to unleash their best ability.